Meet the Group That Sparked the Perry Indictment

Craig McDonald, the director of Texans for Public Justice, is shown at his group's Austin office on Aug. 18, 2014.

Seated at the conference table in Texans for Public Justice’s Austin office, director Craig McDonald reminisces about the liberal-leaning group’s work 11 years ago investigating then-U.S. House Majority Leader Tom DeLay. Then a knock comes from the other side of the office.

Someone is outside. McDonald’s shoulders tense.

TPJ’s only other full-time staffer, research director Andrew Wheat, can't respond because he is on the phone. McDonald reluctantly answers the door, relieved to see a friendly face on the other side. After a moment, he returns to the conference table.

“We’re scared about nut balls coming by,” he explains. “We’ve had so much hate mail, so we’ve locked the doors.”

Much like the frenzied period after Travis County District Attorney Ronnie Earle filed his first indictment against DeLay in 2005, McDonald and TPJ are in the eye of a growing political storm. This time, the attention comes from the complaint they filed against Gov. Rick Perry in June, which yielded a felony indictment last week charging Perry with coercion of a public servant and misuse of official capacity.

“The DeLay stuff got us a decent amount of hate mail,” McDonald said. “But I’ve never seen a reaction like this.”

TPJ describes itself as a “a nonpartisan group that tracks the influence of money and corporate power in Texas politics.” Since 1997, McDonald and his tiny staff has made a name for itself digging through public records, while drawing fire from critics who accuse TPJ of doing the dirty work of Democrats while not being transparent about its own financial backing.

“Texans for Public Justice has always been a political attack machine masquerading as a public interest group,” said Sherry Sylvester, communications director of Texans for Lawsuit Reform, a longtime TPJ critic. “This latest outlandish political attack on Gov. Perry should be dismissed as more of the same from this duplicitous front group.”

TPJ didn’t plan to delve into the complex game of political chicken going on between Perry and Travis County District Attorney Rosemary Lehmberg near the end of last year’s legislative session. Lehmberg had been immersed in a political scandal since April, when a video of her aggressive behavior during her drunken driving arrest drew national attention. TPJ had stayed out of the drama until June 10, when McDonald read in the Austin-American Statesman that Perry was threatening to veto the state's funding of the public integrity unit, housed in the Travis County DA’s office, unless Lehmberg resigned. Perry has said he only acted within the authority he has under the state constitution.

“We decided [to get involved] that Tuesday morning,” McDonald said. “I said to Andrew, ‘This has got to be illegal. The governor can’t threaten the district attorney to do something that is out of his power. She doesn’t work for him. Never has.’”

Perry and his legal team have made his right as governor to veto state funding, and Lehmberg’s behavior during her drunken driving arrest, as central to the indictment. Various national political reporters and pundits have dismissed the indictment as overreaching or politically motivated, often pointing, like Perry, to a governor’s right to use his veto power.

McDonald said those critics are missing a crucial point: TPJ’s original complaint was filed before Perry implemented his veto because the veto is irrelevant.

“The threats are the issue, and I think that’s what the grand jury listened to,” McDonald said. “The only role the veto played and the only reason it’s relevant is that’s the club he held over his head to try to get her to leave her job. The veto is a side player to this. It’s not the subject of the charges.”

McDonald, 64, launched TPJ in 1997 after more than 20 years of work that he described as focused on “campaign reform and accountability.” Raised in Grand Rapids, Mich., McDonald served more than three years in the military during the Vietnam War before returning home to study political science and philosophy at Grand Valley State (now Grand Valley State University).

After working several years as a community organizer in west Michigan, he moved to Washington, D.C., in 1978 to work for Public Citizen, a consumer rights advocacy group founded by Ralph Nader. McDonald helped launch several of the organization’s state offices, including the Texas office in 1984. He stayed with the group until the early 1990s, including several years as its lobbying director.

In 1997, McDonald launched Texans for Public Justice to expose the connection between money and politics at a time when tracking Texas campaign finance records required far more time and resources than it does today, with much of the information online. The group’s first report, released in 1998, traced $14.6 million in donations made to members of the Texas House.

“We had dozens of interns here going through the dusty paper records, documenting how much money came to each member,” McDonald said. “And the reaction to that was about as negative as to the Perry indictment.”

Over the years, TPJ has also filed dozens of complaints against elected officials, mostly Republicans but also some Democrats. The majority of the complaints have been filed with the Texas Ethics Commission. Before last week, the complaint that had drawn them the most attention came in 2003, when TPJ noticed discrepancies between paperwork filed by DeLay’s Texans for a Republican Majority PAC with the Texas Ethics Commission and the IRS.

The group filed a criminal complaint with the Travis County district attorney’s office, which eventually led to the 2005 indictments of DeLay on criminal conspiracy and money laundering. The next year, DeLay resigned from Congress, but has maintained that he did nothing wrong. The legal case has continued for nearly a decade. Last year, DeLay’s conviction was overturned by the Texas Court of Appeals. That judgment was appealed to the Texas Court of Criminal Appeals, which heard arguments earlier this year.

McDonald predicted that DeLay would prevail given the Republican leaning of the court, though he maintains that DeLay did break the law. DeLay has dismissed the saga as politically motivated.

“I think he has paid already a great price,” McDonald said. “It’s 12 years later, and we’re still going to court hearings about it.”

Both McDonald and Wheat say they expect the Perry case to take years as well.

Perry and his defenders have decried the investigation as partisan in nature, with some citing TPJ’s funding from the Open Society Foundations as proof. The OSF was founded by George Soros, a billionaire investor with a long history of supporting Democrats.

TPJ only reveals its institutional funders, which makes up about half of its total budget, according to McDonald. Along with OSF, TPJ cited funding from The Piper Foundation, The Sunlight Foundation, The Winkler Family Foundation and Good Jobs First in its 2013 annual report.

McDonald said his group doesn’t reveal its individual investors for fear of political retaliation. He said he doesn’t consider that policy in conflict with the group’s work in highlighting the impact of money in politics because TPJ does not get involved in elections.

“We have some good-size donors who are involved in lots of regulated activities in Texas,” McDonald said. “Many of our donors these days come from the high-tech community, and the younger progressives.”

Sylvester noted that a leaked tax return from TPJ in 2005 revealed Texas trial lawyers as major contributors.

“Their attacks on conservatives in general and tort reformers in particular serve the narrow special interests of the liberal personal injury trial lawyers who have spent millions on efforts to defeat tort reform leaders like Rick Perry and roll back lawsuit reforms in Texas,” Sylvester said.

McDonald did not deny that he opposes Texas’ past tort reform legislation and that TPJ was launched “as somewhat a reaction to the tort reform movement.” Yet he argued that too much is made of the group’s funding, which usually hovers between $200,000 and $300,000, according to federal filings. Since the recession, even drawing that much support has been a challenge. The group has only raised $130,000 so far this year, he said. TPJ used to have five staffers but now only has three, one of them part-time.

“It’s not like we’re high rollers,” McDonald said. “None of the staff here has been paid in the last three months. We don’t have any money.”

As proof of his reason to be worried about retaliation against his backers, McDonald pointed to an intense IRS audit that TPJ was subject to in 2005, and eventually exonerated. The audit was later traced back to a lawyer close to DeLay.

Disclosure: The Winkler Family Foundation is a major donor to The Texas Tribune. The Open Society Foundation was a major donor to The Texas Tribune in 2010. A complete list of Tribune donors and sponsors can be viewed here.